Amerant Bancorp Inc. · NYSE:AMTB
Amerant Bancorp — Investor Presentation (September 2019)
33 slides from Amerant Bancorp's investor presentation, Sep 30, 2019
Slide 1: Investor Presentation
Investor Presentation As of September 30, 2019
Slide 2: Important Notices and Disclaimers
2 Important Notices and Disclaimers Forward-Looking Statements This presentation contains “forward-looking statements” within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, including, without limitation, future financial and operating results; costs and revenues;
Slide 3: Who We Are
3 Who We Are Geographic Mix September 30, 2019 Loans Deposits • Founded in 1979 • Acquired in 1987 by MSF (1) • 80.1% spin-off in Aug. 2018 § Domestic 3.5% History • Rebranded as Amerant in June 2019 47.3% 96.5% 52.7% • Completed IPO in Dec. 2018 • MSF no longer has any stake in the § International
Slide 4: Investment Opportunity Highlights
4 Investment Opportunity Highlights Established Strong and Significant Fee Pathway to Well-Positioned Franchise in Diverse Deposit Loan Income Strong Attractive Base Portfolio Platform Profitability Markets • Long history with • Combination of • Loan book well- • Wealth • Independence strong reputat
Slide 5: Experienced Management Team
5 Experienced Management Team Frederick • Chairman since January 2019 Copeland • Director of Company and Bank from 2007 to 2018 • Former President and CEO of Far East National Bank Chairman of the Board • Former President and CEO of Aetna International, Inc. • Former Chairman, President, and CEO of
Slide 6: Deep Culture of Enterprise Risk Management
6 Deep Culture of Enterprise Risk Management ü Enterprise-Wide Risk Governance ü Risk Culture ü Risk Appetite ü Strategic Planning Board of Directors Senior Management Three Lines of Defense 1 Front Line Units 2 Risk Management 3 Internal Audit • Own and manage their • Independent from front • Direc
Slide 7: Our New Brand
7 Our New Brand Meant for You: A Different Kind of Bank Our new purpose We are evolving, just like you All that we do, our attitude and behaviors, aim We are renewing our commitment to you by at our ultimate goal: offering the closest, most aiming to keep growing and making possible a personal and e
Slide 8: Market Strategy
8 Market Strategy Our strategy is to operate and expand in high-growth, diverse economies where we can build from our heritage serving the Hispanic community Miami-Dade MSA Target markets have: • Major industry sectors are trade, tourism, services, manufacturing, education, and real estate • Substan
Slide 9: Growing and Diverse Markets
9 Growing and Diverse Markets Branch Footprint(1) Deposit Market Share(2) Market Demographics October 07, 2019 June 30, 2019 2010 – 2020 Est. Population Change Deposits % of Market Market Branches ($mm) AMTB Share % 21.1% 17 banking centers $5,228mm Deposits 13.7% Miami-Dade, FL 9 $4,793 81.6 3.6 7.
Slide 10: Ongoing Business Transformation
10 Ongoing Business Transformation From... To... Part of a diverse international financial group, Focused on traditional community banking with a sophisticated international customer business in the U.S. and an international base business to service valued relationships A number of non-core products
Slide 11: Summary of Our Strategic Plan
11 Summary of Our Strategic Plan Building on our strengths to shape our future Domestic focus Expanding Growth in Core, Increased with an Strong Credit Business and Domestic Profitability International Culture Geographic Deposits and Returns Heritage Presence ▪ Protect and serve ▪ Exit higher-risk ▪
Slide 12: Build on Improving Financial Performance
12 Build on Improving Financial Performance Increased Attractive Risk- Higher Net Improving Enhanced Domestic Adjusted Loan Interest Expense Profitability Deposits Profile Margin Culture Non-performing Domestic Net Interest Efficiency Loans(2) ROE(3) Deposits(1) Margin(3) Ratio(3) / Total Loans(1) (
Slide 13: Investment Portfolio
13 Investment Portfolio Investment Securities Balances and Yields Highlights ($ in millions) • Effective duration of 2.6 years as prepayment $1,750 $86.3 speeds accelerate in the mortgage securities $1,500 $81.2 $77.6 portfolio (due to lower interest rates) and continued sale of municipal bonds due
Slide 14: Strategic Shift in Loan Mix Yielding Benefits
14 Strategic Shift in Loan Mix Yielding Benefits Loan Portfolio Loan Mix by Geography September 30, 2019 December 31, 2015 September 30, 2019 Financial Institutions & Acceptances 0.4% Consumer 1.8% 24.2% 1-4 Family 3.5% 9.2% 96.5% C&I 19.6% 75.8% § Domestic § International Owner Occupied CRE 54.6% C
Slide 15: Balanced CRE Loan Portfolio
15 Balanced CRE Loan Portfolio CRE Portfolio CRE Loan Mix by Primary Market Area(1) September 30, 2019 September 30, 2019 Greater Houston 17.5% Hospitality 6.2% New York City area 24.3% Retail 37.4% Other FL, TX, and NY/ Multifamily NJ 4.0% 30.0% Miami-Dade, Broward, and Palm Beach counties 54.2% In
Slide 16: Disciplined Credit Culture
16 Disciplined Credit Culture Robust Underwriting Standards Non-performing Assets(3) / Total Assets • Credit quality and reserve coverage remains strong 1.50% • The increase in charge-offs was due to: 1.00% ◦ Several international commercial credits (2016) ◦ One isolated CRE loan (1) (2018) 0.60% •
Slide 17: Highly Attractive Deposit Franchise
17 Highly Attractive Deposit Franchise Highlights Deposit Mix (1) Jumbo NIB September 30, 2019 Demand, Time, 12.3% 14.1% • Focus on developing domestic relationships as IB opposed to rate sensitive, non-relationship time Demand, deposits Retail Total Deposits: Time, 19.7% $5.7 billion 27.8% • Experi
Slide 18: Wholesale Funding
18 Wholesale Funding FHLB and Other Borrowings by Maturity Advances from the Federal Home Loan Bank and Other September 30, 2019 Borrowings ($ in millions) Year of Interest Rate 3Q18 2Q19 3Q19 Maturity 2020 27.8% 2018 1.25% to 2.38% $ 437 $ — $ — 2019 2019 1.80% to 3.86% 225 350 195 16.7% 2020 1.50%
Slide 19: Interest Income and Margin Trends
19 Interest Income and Margin Trends Highlights Impact on NII from Interest Rate Change(3) (As of September 30, 2019) • Increase in NIM in 3Q19 driven by higher average rates on assets and the strategic shift in loan mix $230 4.0% towards higher-yielding domestic relationship-based loans 2.0% $220 (
Slide 20: Wealth Management Franchise Expansion - Key Component of Noninterest Income
20 Wealth Management Franchise Expansion - Key Component of Noninterest Income Wealth Management Platform 2019 YTD Noninterest Income Mix Total: $41.1 million Amerant Trust Amerant Investments § Deposits and service fees • Estate Planning • Brokerage Services 42.0% 31.1% § Brokerage, advisory, and f
Slide 21: Increasing Operating Efficiency
21 Increasing Operating Efficiency Cost Initiatives Efficiency Ratio(1) 84.7% • Simplification of business model Rationalization and product offerings as part of 78.0% 78.8% 77.6% of Business Lines spin-off 73.8% • Deemphasized international business resulting in less complexity and reduced costs •
Slide 22: ROA Expansion
22 ROA Expansion Enhanced Profitability Drivers for Improvement 1 Technology and Expense Saving Initiatives Target ROA Continue to rationalize expenses and improve scalable platform 36 bps increase 2 Changing Business Mix Redeploy of lower yielding loans into higher yielding domestic C&I, CRE, and r
Slide 23: Investment Highlights
23 Investment Highlights Shift from preservation of capital to driving profitable growth and shareholder value Substantial and continuing insider ownership, approximately 30% Strong asset quality and domestic loan growth Focus on expanding domestic deposit base throughout our high growth U.S. market
Slide 24: Appendices
Appendices
Slide 25: Summary Financial Statements
25 Appendix 1 Summary Financial Statements December 31, September 30, (in millions) 2015 2016 2017 2018 2019 Assets Cash and cash equivalents $138.3 $135.0 $153.4 $85.7 $101.3 Total Securities (1) 2,055.6 2,123.2 1,777.0 1,671.2 1,562.8 Loans Held for Sale (HFS) 9.7 — 5.6 — 1.9 Loans, Gross (Excl HF
Slide 26: Summary Financial Statements (cont'd)
26 Appendix 1 Summary Financial Statements (cont’d) Years ended December 31, Nine months ended (in thousands) 2015 2016 2017 2018 September 30, 2019 Total Interest Income $208,199 $238,827 $273,320 $309,358 $237,737 Total Interest Expense 35,914 46,894 63,610 90,319 75,911 Net Interest Income $172,2
Slide 27: Non-GAAP Financial Measures Reconciliations
27 Appendix 2 Non-GAAP Financial Measures Reconciliations Explanation of Certain Non-GAAP Financial Measures This Presentation contains certain adjusted financial information, and their effects on noninterest income, noninterest expense, income taxes, net income, efficiency ratios, ROA and ROE and c
Slide 28: Non-GAAP Financial Measures Reconciliations (cont'd)
Appendix 2 28 Non-GAAP Financial Measures Reconciliations (cont’d) (in thousands) 3Q19 YTD 2018 2017 Total noninterest income $ 41,139 $ 53,875 $ 71,485 Less: net gain on sale of New York building — — (10,469) Adjusted noninterest income $ 41,139 $ 53,875 $ 61,016 Total noninterest expenses $ 157,58
Slide 29: Non-GAAP Financial Measures Reconciliations (cont'd)
29 Appendix 2 Non-GAAP Financial Measures Reconciliations (cont’d) (in thousands) 3Q19 YTD 2018 2017 Net income $ 37,859 $ 45,833 $ 43,057 Plus after-tax restructuring costs: Restructuring costs before income tax effect 4,932 6,395 — Income tax effect (1,060) (1,303) — Total after-tax restructuring
Slide 30: Non-GAAP Financial Measures Reconciliations (cont'd)
30 Appendix 2 Non-GAAP Financial Measures Reconciliations (cont’d) 3Q19 YTD 2018 2017 Basic earnings per share $ 0.89 $ 1.08 $ 1.01 Plus: after tax impact of restructuring costs 0.09 0.12 — Plus: after tax impact of total spin-off costs — 0.16 0.07 Plus: effect of lower rate under the 2017 Tax Act —
Slide 31: Non-GAAP Financial Measures Reconciliations (cont'd)
31 Appendix 2 Non-GAAP Financial Measures Reconciliations (cont’d) (in thousands, except per share data and percentages) 3Q19 YTD 2018 2017 Efficiency ratio 77.64 % 78.77 % 73.84 % Less: impact of restructuring costs (2.43)% (2.34)% — % Less: impact of total spin-off costs — % (2.44)% (1.86)% Plus:
Slide 32: Non-GAAP Financial Measures Reconciliations (cont'd)
32 Appendix 2 Non-GAAP Financial Measures Reconciliations (cont’d) (1) Expenses incurred for actions designed to implement the Company’s strategy as a new independent company. These actions include, but are not limited to, reductions in workforce, streamlining operational processes, rolling out the
Slide 33: Thank you
AMERANT Thank you
Amerant Bancorp — Investor Presentation (September 2019) on 6ix